I’m a staff writer covering all things Wall Street and Investing. I have a love hate relationship with the world of finance. I am fascinated by the industry’s power and influence around the globe, and the ingenuity of the people it employs. Not so much a fan of the lack of accountability when the system fails—which it often does: I'm always on the hunt for people and companies to profile.

How An IRS Telephone Scam Nearly Duped Me Out Of $5,000

I was almost arrested this morning. My assets were nearly seized. My passport and drivers license were about to be suspended. That’s what the voice on the other end of my cellphone was explaining while I was on my way to work.

It began after Brian Cruz called my house early this morning. He left his telephone number, name and noted he was calling from the IRS.

I put the number in my cell phone without searching for it online first. It had a 202 area code. It had to be official, right?

I called, and the man who picked up said I’d reached the investigations bureau for the IRS. I asked for Cruz, but he wasn’t available. The man who picked up told me to give him the telephone number where Cruz left the message. I did, and then it began.

After he confirmed my home telephone number, he stated that I’d attempted to defraud the IRS, and that the government was now taking legal action against me including issuing a warrant for my arrest within the next hour. When I asked what this was all about, he asked if I aware of an investigation against me. “I have no clue about an investigation. This is the first time I’m hearing about any of this,” I said in a panic.

He asked if I had a lawyer, and then told me about the investigation. “Do not interrupt me while I speak. Ask your questions after I’m finished,” he said.

For the next 5 or so minutes, I listened in absolute panic. He recited the last four digits of my social security number and knew where I worked. He told me that I’d failed to declare all of my income and engaged in tax fraud. He then told me the government was seizing any property and any assets in my name, that it had already froze my bank and credit card accounts, suspended my driver’s license as well as my passport. There would be a massive penalty, plus possible jail-time. Further, my social security number was now blacklisted.

By now, I’d stopped in my tracks as I listened with fear to this IRS agent who went on to tell me someone would be waiting at my office to arrest me. When I interrupted him to ask why this was the first time I was hearing about this, he ignored my question, paused and began repeating the details of the investigation.

When he was finally done (by now, my heart is racing) I asked again why this was the first time I was hearing about it. His reply: “This isn’t our first attempt to make you aware. We came to your house but you were not home.” I then asked what I owed the government. Approximately $4,900.

He repeated that my social security number would be blacklisted. I don’t even know what that means, but it was enough of a threat for me to ask why I couldn’t just pay him the amount owed. He told me the investigation was beyond the point of payment–it was too late.

But then he went on to ask me questions like: Have I been part of any previous tax fraud cases? Are there currently any judgements against me? Are there any lawsuits pending against me?

“Absolutely none that I know of. This is the first time I’ve ever been faced with something like this,” I say with my voice trembling. He tells me he will speak with the lead investigator and see if we can work something out. He puts me on hold.

At this point, I should have known something was wrong. Why was he suddenly willing to negotiate? Being an IRS agent, wouldn’t he already have records showing my clean record? Wouldn’t I have been audited if the IRS believed I owed taxes? They’re seizing my property over $4,900?

However, those weren’t the thoughts that crossed my mind in the few minutes I was on hold. Instead of thinking logically, I was imagining being arrested in front of the Forbes office. I even started thinking about Wesley Snipes, and wondered if this is what he went through. (Seriously.) Had he been arrested? Did he have a one hour warning? How much did he owe? It’s amazing how quickly I started to doubt my innocence and forgot any rights I might have once the government–or someone I believed worked for the government–decided I was guilty.

The agreement had three conditions: First, I had to agree to be recorded via telephone, and state that I’d never attempted to cheat the IRS. Second, I only had one hour to make the payment otherwise the warrant would be issued. Third, since my accounts had been frozen, I’d have to wire the amount owed or bring it to a local IRS office within an hour.

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Glad you did not lose any money. Your story points to an equaling disturbing fact though: The IRS is perceived as an out of control agency hostile to most individuals and so this sort of scam seems like something they would do. They have come to be seen as an agency with a political agenda instead of just collecting taxes. Hope the criminals come to a bad end and wish the IRS would become more civilized.

Same thing happened to us, also yesterday. Some neighbors also had a message on their answering machine, same idea. My wife was told I would be arrested at work yesterday and be in court by today, going to jail if I didn’t pay in court. Not quite how the justice system works in this country!

Since I have dealt with the IRS regarding mistakes on a return in the past, I knew that this is not how they operate. In fact, I had one of the best-ever customer service experiences with them back ten years ago. I believe the IRS operates on the premise that they will get better cooperation by being nice to people.

Thanks for sharing your story with us, Halah. Unfortunately, these types of tax scams are quite common throughout the year, but they tend to become more pervasive during tax season.

So far, three of our clients in California have received similar phonecalls from scammers claiming to be from the IRS. The calls originated from the same “San Francisco” phone number; 415-251-3754. We have filed a report with the proper agencies and are compiling the scammers’ phone numbers to aid the IRS in its investigation. Victims of these tax scams are welcome to contact me to submit information about the perpetrators.

The biggest scam is the federal courts and IRS and their targeting of innocent people: http://tekgnosis.typepad.com/tekgnosis/2014/03/re-case-no-214-cr-00027-ndf-2-notice-of-motion-and-motion-to-dismiss-with-prejudice-18-usc-1514b-377.html

I got a call from a person today, identifying a an IRS person. When I said I’m recording the conversation, asked him the call back number and his employee ID, he hung up immediately. I tried calling him back, he’s not responding any more. His number was 202-864-1181.

I got a call from 202-864-1181 claiming to be from IRS and stating that there is a warrant issued on my name. Surprisingly he knew my name. I immediately pulled out my iPad and started recording. I told him I’m recording the conversation. I asked him to state a callback number, he promptly repeated above number. When I asked his employee id he hung up. I called him back on the same number. After 2-3 retries, the same person picked up stating “Welcome to IRS”. Since the number is still active, can someone track this person ASAP and put him behind the bar? If needed, I can share this brief 30-40 second audio recording done thru my iPad.

Thank you for posting this extremely helpful article. Today I received multiple calls from another scam, pretending to be an IRS agent. This is the number they call me from: 202-241-6439. Be careful this is definitely a scam!!

This just happened to me TODAY!! I just was looking online to see if it was indeed a scam. Someone with a very thick accent called and said they were from the IRS, and that I needed an attorney asap because I was being accused of fraud. He asked do you have an attorney. So I began to ask questions, like whats this about, what fraud? He transferred me to his superior, another thick accent. He told me that I was accused of fraud against the IRS and that I need an attorney. The case was going to be filed against me in 45 minutes! My heart was racing and I was panicking. The supervisor, or whoever he was didn’t like my questions. I asked for his phone number and his supervisor and the phone went dead. He hung up! So then I did a search on line still panicked and found this article. Thank goodness! I can now calm down. So glad I didn’t have a heart attack.

OMG, thanks for this blog. I am currently on the phone with IRS (the real one) right now. Just to make sure that everything is ok with my account. How could i possible get a lawsuit if i pay way too much taxes and barely get a refund every year. I think they are targeting young professionals. and its weird that this Happens when i was on my to work and that were blocks away from each other. My office is on 15 and 5th.